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Abstract

Strategic alliance between banks and telecommunication firms in mobile banking is of
value to customers and the firms. The alliance adds value to the consumers as well as to
the capital invested into the firms. In Kenya, adoption of electronic and mobile banking
has been on the rise since introduction of mobile telephones in late 90s. Banks and
mobile telecommunication firms have entered into strategic partnerships to provide
mobile banking services. Cooperative bank has been seen growing very fast and
increasing the market share rapidly. This has been successive through the introduction of
various services that suit the low income earners. But the bank has been facing
competition from other banks especially; Equity bank and Kenya Commercial bank of
Kenya. Thus the bank projected that to be viable in the market, they need to partner with
Safaricom Ltd- a mobile service operating company to facilitate easier way of money
transfer. This research sought to find out the influence of strategic alliances on
performance of Co-operative bank and Safaricom limited. The study adopted a case study
design so as to undertake an in-depth and comprehensive inquiry. The study interviewed
senior managers from Safaricom limited and cooperative bank. Content analysis was used
to analyse the data and generate relevant results. This study established that mobile
telephone firms receive cost and product related benefits more than other benefits while
banks got market related benefits more than other benefits. Another key conclusion was
that mobile banking services should pay more attention to those benefits that well address
their needs. This study therefore recommends that strategic partnerships have benefits in
major ways and that this concept should be employed by similar organizations in order to
survive and sustain their operations in the competitive environment. The study will
contribute to the existing vast body of knowledge in validating the need of strategic
alliances in today’s environment. The study validates the need for organizational learning
and consequently the theory of organization learning because specific knowledge can be
transferred through licensing; tacit knowledge the knowledge embedded in an individual
can only be transferred by learning alongside the individual and this can only be done
when there is an alliance.